NACG signs its biggest deal ever

Key Takeaways:

• MacKellar’s five-year, $2-billion extension in Queensland is the largest deal North American Construction Group has ever signed, adding about $800 million to the original 2022 agreement.
• The award pushes NACG’s total contractual backlog to a record $4 billion, with roughly three-quarters tied to Australian projects, giving the company clear revenue visibility through 2029.
• The amended contract introduces performance-based risk-and-reward provisions but requires no additional growth capital, as the mine will continue operating at its current run rate.

The Whole Story:

Alberta-based North American Construction Group Ltd. (NACG) has landed the largest contract in its 70-year history after its Australian subsidiary, MacKellar Group, secured a five-year extension worth about $2 billion at a coal mine in Queensland.

The amended agreement, which now runs to April 30, 2030, boosts NACG’s contractual backlog to a record $4 billion on a pro-forma basis, up from $3.2 billion at the end of the first quarter. Work in Australia accounts for roughly three-quarters of that total, giving the heavy-equipment contractor “full top-line visibility to 2029 at current levels,” the company said.

MacKellar’s new scope adds roughly $800 million to the original deal signed in 2022. NACG said the extension introduces risk-and-reward provisions tied to operational performance but does not require additional growth capital because the mine will continue at its current production rate.

“Signing the largest contract in our history is a testament to the consistent execution and trusted partnerships we’ve built,” chief executive Joe Lambert said in a statement. “With record-high backlog, including more than $3 billion from Australia alone, we have exceptional revenue visibility through the decade and a rock-solid foundation for long-term growth.”

Chief operating officer Barry Palmer called the extension “a tangible demonstration of the successful and productive relationship we’ve had with this customer since inception in 2022” and said the team is “aligned with this customer’s continued success.”

NACG entered the Australian market two years ago when it purchased MacKellar for about $395 million, expanding its earthmoving fleet and diversifying beyond Canada’s oil-sands sector. Operating since 1966, MacKellar specializes in heavy earthmoving equipment and has worked on major mining and civil projects across Australia.

Headquartered west of Edmonton, NACG provides heavy construction and mining services in Canada and Australia. Its shares trade on the Toronto and New York stock exchanges under the symbol NOA.